It is commonly held that work is the best pathway out of
poverty. The living wage takes that view seriously. It figures out what you
actually need to earn to be above the poverty line and to participate in the
life of your community.

The living wage in Waterloo Region for 2014-15 is $16 an hour. That’s the hourly wage you need to earn working full-time to pay for
housing, a nutritious diet, transportation, clothing, and insurance for dental,
vision and prescriptions. It also allows for social inclusion, covering the
cost of phone and internet, some recreation and outings and a modest vacation.

The Living Wage Employers Program encourages participating employers
to raise the wages of all their workers to the living wage rate or higher. In
fact, it is a requirement of the program. For those that entered the program as
Champions, the highest level attainable, they already do that. Employers that
entered at the Partner, Supporter or Leader levels already pay their full-time
staff a living wage.

False trade-off between inequality and economic growth

Not long ago these voices held that there was a trade-off between economic growth and reducing inequality. In short, that inequality was a necessary evil to attain the goal of economic growth.

It turns out that was a false trade-off. Inequality actually weakens economies. Lower inequality “is robustly correlated with faster and more durable growth,” report researchers at the IMF. And the OECD now recognizes that “policies that help to limit or reverse inequality may not only make societies less unfair, but also wealthier.”

Canada’s tax and transfer system has long played a role in reducing market-based inequality. But as economists from one of Canada’s major banks, TD Canada Trust, observe, that role was significantly weakened in the 1990s. Federal and provincial governments in Canada focused on eliminating deficits by cutting back transfers. “Cuts in transfers from one level of government to the next ultimately fed through to less transfers to individuals.”

But when federal and provincial surpluses re-merged, higher levels of inequality in Canada remained. “Part of the reason,” the TD economists explain, “is that transfers only stabilized and many policies put in place when surpluses occurred were more beneficial to higher income earners.”

A banker makes the case for leaning against income inequality

The TD economists recently made “the case for leaning against income inequality in Canada.” OECD economists agree. “Not only cash transfers but also increasing access to public services, such as highquality education, training and healthcare, constitute long-term social investment to create greater equality of opportunities in the long run.”

Investment in public services and income transfers is good for people and the economy. The fact that bank economists and powerful international economic organizations recognize that and are advocating such investments is helpful.

Repair work needed in the labour market

It is also worth recalling that inequality is also affected by how much people earn at work. Research by the Canadian Centre for Policy Alternatives (CCPA) documented how most Canadian families with children were working longer hours but earning less than their parents’ generation. And that was happening in robust economic times before the 2008 global recession. At the same time, earnings for the top ten percent of families increased – despite a reduction in work hours from a generation earlier.

So fixing inequality needs to happen in the labour market, as well as through public policy. And while the minimum wage, employment standards and labour legislation are important tools in repairing earnings for workers in the bottom half of the labour market, there are things employers can do themselves.

The growing movement of employers committed to paying a living wage to all of their employees is one of those things.

The living wage rate is based on the actual cost of living in specific communities. It is about more than reaching the poverty line. It reflects a decent, albeit modest, standard of living that allows workers and their families to participate in the life of their community. In Waterloo Region, the living wage rate is currently $16 an hour, much higher than the $11 an hour Provincial minimum wage.

In Canada, the living wage movement is gathering steam with dozens of employers in BC, Alberta and Ontario already involved. As the living wage movement grows – there are over 1,500 living wage employers in the UK for instance – it is improving the earnings and living standards of thousands of workers.

June 4, 2015

I have taken an extended hiatus from blogging. To get started again, I decided to share some material I have written for Living Wage Waterloo Region.

Living Wage Waterloo Region launched on November 4, 2014, at the MCCO offices in Kitchener.

Since February 2015, I have been working half-time as Program Manager for Living Wage Waterloo Region, in addition to my ongoing role at MCCO Walking with People in Poverty Program Coordinator.

Living wage is an issue that has interested me for years. In fact, I was looking back at a couple posts I wrote for this blog several years back that looked at biblical stories related to justice for workers.

So look for some reflections and news on the living wage movement and other public policy issues to promote sustainable livelihoods and help eradicate poverty in Ontario and in Canada.

December 3, 2014

Ontario’s
second Poverty Reduction Strategy identified ending homelessness as a long term
goal, but stopped short of offering specifics as to how this goal would be
approached.

In the strategy, the Government stated its intent to “seek expert
advice on how to define the problem, measure it, collect data, and set targets”
(p. 35).

Much work has already been done to define, measure,
and set targets around the complex problem of homeless. While developing
Ontario’s strategy will require time and thought, policymakers will be able to
build on the good work already being done in Ontario municipalities, other
provinces, and other countries around the world. The Government should be able
build on this knowledge and outline a timeline and resource plan to end
homelessness in Ontario in time for budget 2015-16.

This backgrounder surveys definitions, indicators and targets currently in use in Ontario and other jurisdictions.

The Wynne Government unveiled Ontario’s second Poverty
Reduction Strategy on September 3, 2014. The new Strategy puts a focus on
ending homelessness. Deputy Premier Deb Matthews, who is the Minister
Responsible for the Poverty Reduction Strategy, said the new strategy will
continue to work on reducing child poverty – to reach the original 25% target --
as well as employment, education and training for youth. But ending
homelessness stands out as the boldest goal in the new strategy.

What struck me as I listened to Minister Matthews launch the
new strategy was the lack of specific targets and timelines to go with the goal
of ending homelessness. The strategy obviously will need an action plan and
investment strategy. But if the strategy is to succeed, it also needs clear
targets and timelines, including targets for both outcomes and policy effort.

The need for clear targets and timelines for poverty
reduction strategies was identified by the National Council of Welfare as the
first cornerstone in their 2007 report, Solving Poverty. The United Nations
Commission for Human Rights has laid out principles
and guidelines for implementing poverty reduction strategies. The
Commission says a poverty reduction plan “must
set benchmarks (i.e.,
intermediate targets) corresponding to each ultimate target. As a
prerequisite of setting targets and benchmarks, the State should identify appropriate
indicators, so that the rate of progress can be monitored and, if progress is
slow, corrective action can be taken. Indicators should be as disaggregated as possible for each subgroup
of the population living in poverty.” (p 12)

Leading the Poverty Reduction Strategy

As President of the Treasury Board, you will appreciate just how important reducing homelessness and poverty are to the province. Homelessness costs Ontario’s economy. Investments in housing can mean savings down the road because people are healthier, more ready for employment, and participating in the community. As we look for ways to make the most of public investments, it becomes clear that human resources are the province’s most valuable asset in overcoming its fiscal challenges. When you leave no one behind, you arrive at a new destination stronger than ever.

Strategic decisions about our investments must be informed by our commitment to protecting the most vulnerable in our province. Building on our government’s work under the first strategy, I am honoured to appoint you as Minister Responsible for the Poverty Reduction Strategy and I ask that you oversee the implementation of Ontario’s new Poverty Reduction Strategy: Realizing Our Potential.

Your leadership on this file will include working with our community, businesses and not-for-profit partners to achieve better outcomes for Ontarians living in poverty. Working with your minister colleagues, I ask that you focus on:

Continuing to break the cycle of poverty for children and youth.

Enabling persons to move toward employment and income security.

Working toward a long-term goal of ending homelessness in Ontario.

Using evidence-based social policy and measuring success.

Continuing to call on the federal government to work collaboratively with Ontario to develop and implement solutions that meet the needs of Ontarians.

September 2, 2014

Ontario's 2nd Poverty Reduction Strategy is being released on Wednesday, September 3.

No doubt it will build on things included in the first PRS. And it will no doubt incorporate things announced in the 2014 Budget.

A very important piece will be to see how the Government will expand dental and prescription drugs benefits to children and adults with low incomes. This is what the Wynne Government announced in its 2014 budget:

As part of the first Poverty Reduction Strategy, the government launched the Healthy Smiles Ontario program in 2010, which provides dental services to children in low‐income working families. Beginning in April 2014, program eligibility is being expanded to give 70,000 more children access to dental services.

The government will further integrate existing publicly funded dental programs for children into the Healthy Smiles Ontario program to provide seamless enrolment and streamlined administration.The government is also proposing to further expand access to health benefits for children in low‐income families. Once fully implemented, children in low‐income families would be eligible to receive additional health benefits including prescription drugs, assistive devices, vision care and mental health services. By expanding eligibility to approximately 500,000 children, these benefits and services would further improve health outcomes for low‐income children and help their families remain in employment.

Moving forward, the government will consult with stakeholders to explore options to extend health benefits to all low‐income Ontarians.

If it does nothing else, the second Poverty Reduction Strategy should make good on these promises. That would be an important step forward for all Ontarians.

But it will be good if the strategy moves on other things like decent employment and adequate income supports, affordable housing and a plan to tackle homelessness.